Asian stock market continues to rise after boost from China rally

Asian shares moved higher on Wednesday, with a notable boost from China, as U.S. stocks continued to reach new records in a relatively calm trading session. Chinese property developers experienced a surge following Beijing’s announcement of various measures to revive the housing market after a prolonged slowdown. This news also positively impacted prices for commodities like oil and copper.
Early on Wednesday, U.S. futures were lower, and oil prices also saw a decline. The Hang Seng index in Hong Kong rose by 1.8%, reaching 19,346.68, building on the previous day’s over 4% gain. In mainland China, the Shanghai Composite index surged by 1.8% to 2,913.47 after the reveal of coordinated efforts to support the world’s second-largest economy.
According to Stephen Innes of SPI Asset Management, “Chinese policymakers are throwing everything they’ve got to fight off deflation and breathe life into growth. Will it work long-term? Who knows. But for now, Chinese stocks are gobbling up these stimulus efforts like they’re at an all-you-can-eat buffet”.
In other markets, Japan’s Nikkei 225 rose by 0.3% to 38,068.22, while South Korea’s Kospi remained flat at 2,632.24. Australia’s S&P/ASX 200 also recorded a 0.1% increase, reaching 8,149.00.
On Tuesday, U.S. stocks climbed to new highs, with the S&P 500 closing at 5,732.93, marking its 41st all-time high this year. The Dow Jones Industrial Average also climbed by 0.2% and the Nasdaq composite by 0.6%. The Federal Reserve’s recent decision to adjust interest rates has been positively received by the markets, as the central bank is now reducing rates to support the U.S. economy.
A report released on Tuesday revealed that U.S. households are expressing concerns about the job market, leading to a drop in confidence levels. This is significant as consumer spending is a key driver of the U.S. economy. Lower interest rates can potentially help the economy by reducing borrowing costs for consumers and businesses.
In the bond market, Treasury yields fell after the consumer confidence report, with the 10-year yield dropping to 3.73%. Lower interest rates can stimulate economic activity by making borrowing more affordable. Technology company Nvidia experienced a strong rebound on Tuesday, with its stock rising by 4%, supported by lower interest rates and improved market conditions.
In early trading on Wednesday, U.S. benchmark crude oil was down to $71.25 per barrel, and Brent crude stood at $74.23 per barrel. The dollar also saw some movement, rising to 143.40 Japanese yen and the euro climbing to $1.1200.